Know The Importance Of Independent Contractor Agreement

Independent Contractor Agreement: Why Buyers/Clients Need Them and What It All Entails

Independent contractor – This is a person who is working for someone but not technically as an employee. If you own a business and have someone working for you that is not an employee but an independent contractor, then it means they own their own business and must take care of their own taxes, insurance and expenses. And, when they work with you, they probably submit to you an independent contractor agreement

Independent Contractor vs. Employee

When you hire employees to work for you, you can’t circumvent state laws by claiming they are independent contractors. After all, ever states has set rules and regulations that define what an independent contractor is. The most important rule of hiring an independent contractor is that you may not tell them when and how to work. They have their own schedule and handle the project as they see fit. The moment you begin supervising them such as:

- When they must get started
- How the works needs to be done
- Providing them with tools to complete the job

Then you treat them as an employee.

Why You Should Have An Independent Contractor Agreement

An independent contractor agreement is used when you decide to make a contract; although having it in writing isn’t always necessary. More often than not, an independent contractor agreement is placed in writing and is more important than an actual employee agreement because it’ll outline what the job is and when the expected due date is. An independent service contract tends to lay out the job’s location and work scope. Plus, the parties will concur that the job is done in a reasonable amount of time unless exceptional requirements are stated in another attachment.

There may be times when you must change or fire an independent contractor for any number of reasons:

1 – Weather conditions can delay a deadline.
2 – Contractor may have been in an accident and cannot perform his/her work in a normal manner.
3 – Contractor may get sick or have a family emergency that delays work.

Should any one of these things happen, you can find forms for both the modification of the independent contractor agreement and the termination of independent contractor agreement.

For tax reporting purpose, it is important to distinguish whether the individuals are employees or independent service contractor. Therefore, you should know the business relationship between you and the service provider. When you do that, ensure to record all information and the evidence of the degree of control.

For more legal forms, go to our site, and you can find many legal resources and legal forms information that are completely free of charges, including Rental Agreement and sales and purchase of a business that are popular among many business owners who are interested in the process and forms regarding selling or buying a business.